What is Shrinkflation? An Inflation Explained Video

Video summary

This video explains what shrinkflation is, with real world examples, and why it is relevant today.

Full transcript

Have you been hearing the word “shrinkflation” on social media or in the news lately? Do you know what it is? While not a traditional economics term, shrinkflation refers to getting a smaller quantity or lower quality of an item for the same price. So, say you see a bag of chips at the grocery store for $2.99. It has a lot of chips in it. Then, the company makes a change and decreases the amount of chips in the bag. It still costs $2.99, so it doesn’t seem like the cost has gone up, but the price per chip has. They could also make the chips smaller or decrease the quality of the chips. All of these are examples of so-called shrinkflation. Talk and evidence of shrinkflation have increased because of the recent surge in inflation. While companies are experiencing higher production in shipping costs, some may be concerned about how much they can raise prices and have adopted shrinkflation practices. But what has led to the recent inflation surge? Check out the Cleveland Fed Center for Inflation Research for the answer to this question and to better understand inflation and how it affects our economy.